Zimbabwe’s ruling class riches fuelled by diamonds

Zimbabwean President Robert Mugabe. State cannot trace proceeds from its minerals PHOTO | AFP

What you need to know:

  • The 92-year-old Robert Mugabe skirted the topic of the role played by the ruling elite in the looting. 
  • The common tale is that diamonds were discovered in Marange in 2006.
  • Thousands of illegal miners swamped the area and fed syndicates with the gems until 2008 when the governments sent in soldiers to flush them out.
  • Mpofu appointed or influenced the appointment of most of the people to represent government stake in companies involved in Marange diamond production and marketing, according to the parliamentary study headed by Chindori-Chininga.

Zimbabwe president Robert Mugabe got the world angry in March when he used his birthday interview with state TV to say his country produced $15 billion diamonds in six years, yet only $2 billion of the gems could be accounted for. 

He dumped the stinking carcass at the doorstep of firms that had been operating in rural Marange and said he had no clue how it happened. That way, the 92-year-old skirted the topic of the role played by the ruling elite in the looting. 

The common tale is that diamonds were discovered in Marange in 2006. Thousands of illegal miners swamped the area and fed syndicates with the gems until 2008 when the governments sent in soldiers to flush them out.

This paved the way for commercial production that began in 2009. By 2015, eight companies were extracting the diamonds — most of them in joint ventures with the government.  

Discovery of diamonds in the area dates earlier than the 2006 rush. De Beers, the world’s largest diamond firm, held an Exclusive Prospecting Order over Marange from early 1980s via a subsidiary, Kimberly Searches Ltd.

This order expired in 2006 and the British-registered African Consolidated Resources took over exploration rights. ACR challenged state takeover of mining rights and initially won through a High Court order but the same court reversed the decision in September 2010.  

A parliamentary committee on mining, headed by Edward Chindori-Chininga, estimated in a 2013 report that Zimbabwe had the capacity to supply 25 per cent of the world market. However, there were concerns that not much was coming out of the mines.  

By 2014, alluvial diamond deposits were running ultra-thin, meaning extraction had to go deeper in search of the stones, but the companies were ill-prepared.

Late last year, the government expressed dismay at the “mysterious” losses. It announced the formation of a consolidated outfit that it is now spearheading.
Top government officials and their cronies amassed overnight riches.  

COMMERCIAL EXTRACTION STARTED

Obert Mpofu was the mines minister from 2009 when commercial extraction started. He had been in business for long but his profile was modest until he landed in the ministry. His investments straddled transport, banking, tourism, real estate, mining, ranching and the media. He was rumoured to own half of Victoria Falls Town.  

Mpofu’s empire began to crumble when he was moved to the transport ministry in 2013. The Zimbabwe Mail newspaper he owned with Robert Mhlanga, a former Air Force officer collapsed. So did Allied Bank which he had bought.

The minister says he built his wealth from the money he got when he left a Zanu-PF owned company in the 1980s. His tale is not convincing.

Sceptics include former finance minister in the 2009-2013 government of national unity, Tendai Biti. “Mpofu must face an independent commission of inquiry,” he said.

Biti is angry at the president for shielding Mpofu from scrutiny. He accuses Mpofu of barring him from directly engaging with the mines when he (Biti) was finance chief.  

Mpofu appointed or influenced the appointment of most of the people to represent government stake in companies involved in Marange diamond production and marketing, according to the parliamentary study headed by Chindori-Chininga. The MP was from the ruling party and died in a mysterious car crash months after the release of the report.  

The report is brazen in its condemnation of Mpofu who signed himself off as Mugabe’s “Ever Obedient Son”.

“Board appointments…were being done by the minister of mines in clear violation of the law. Due to the unilateral appointments, certain individuals with a conflict of interest were appointed.”

Four key people with Zanu-PF links were named. Mhlanga, who was the chairperson of Mbada Diamonds, was also a shareholder in Liparm — a subsidiary of the giant mining firm that the report said was arrogant and untouchable.

CHARGE LATER DROPPED

Besides owning the Zimbabwe Mail with Mpofu, he shared more than his first name with President Mugabe. He was the leader’s helicopter pilot for a long time.

According to uncorroborated reports, Mhlanga said he represented Mugabe’s business interests and the president was the one who ordered his appointment as Mbada boss.

He was also implicated in a 2002 sting operation against Morgan Tsvangirai, the opposition leader, who was accused of plotting to “exterminate” Mugabe though the charge was later dropped.  

Mhlanga hit the headlines when he acquired prime real estate in Durban and Johannesburg. South African media reported in mid-2012 that Mhlanga bought a $24.5 million mansion in Kwa-Zulu Natal, complete with two artificial lakes, bullet proof windows, a helipad and an underground bunker.

There was speculation that the mansion would be Mugabe’s get-away or retirement home but no proof has been provided yet. Documents in South Africa show that, in one day in January 2011, Mhlanga bought three properties valued at $7.4 in Durban and Sandton. He bought more properties elsewhere, sometimes at inflated prices.  

Other officials named include Goodwills Masimirembwa who was the chairperson of ZMDC, the government agency tasked with diamond production.

Current mines Walter Chidhakwa toured Manicaland province where Marange is located and had no kind words those named in the report.

“We want to see politicians who protected them (the syndicates) charged,” he said.  

Army generals are also accused of taking advantage of the murk in the diamond industry to enrich themselves.